Air India, Air India Express to levy fuel surcharge as jet fuel prices surge

Airfares are set to rise after Air India and Air India Express announced a phased introduction of fuel surcharges on domestic and international tickets in response to the sharp increase in jet fuel prices linked to the ongoing West Asia conflict .

In a statement on Tuesday, the Tata Group-owned airline said the surcharge will come into effect from March 12 . In the first phase, a ₹399 fuel surcharge will be imposed on each domestic flight ticket, including routes within the SAARC region.

For international travel, passengers flying to West Asia will pay a USD 10 surcharge , while charges for Africa routes will rise by USD 30 to USD 90. Fuel surcharges on Southeast Asia flights will increase by USD 20 to USD 60, and the new rates will also apply to Singapore services, which currently do not have any surcharge.

In the second phase starting March 18 , surcharges on long-haul routes will be raised further. The fuel surcharge for Europe flights will increase from USD 100 to USD 125, while North America and Australia routes will see charges rise from USD 150 to USD 200.

Air India said the move was necessitated by the steep escalation in Aviation Turbine Fuel (ATF) prices , driven by supply disruptions and uncertainty in global energy markets amid the West Asia conflict. Jet fuel prices tend to track crude oil movements, and geopolitical tensions in the region have pushed fuel costs significantly higher in recent weeks.

The impact is particularly significant for airlines because ATF accounts for around 40% of total operating costs , making it the single largest expense in airline operations. In India, the burden is further amplified by high excise duty and VAT on aviation fuel in major metro cities, increasing financial pressure on carriers.

The airline said introducing a surcharge was necessary to maintain operations, warning that some flights could become economically unviable without cost adjustments .

Industry analysts believe the move could prompt other Indian carriers such as IndiGo, SpiceJet and Akasa Air to review their pricing if fuel prices remain elevated. However, sustained fare increases may affect passenger demand, particularly in India’s price-sensitive market where travel growth is closely tied to affordable ticket prices.

Tickets issued before the surcharge takes effect will not be impacted , unless passengers make changes that require a fare recalculation.